Here's the image in question:
Basically, the subject in the foreground is showcasing a company's product for an advertisement. The graffiti holder has argued that the image infringes on their copyright. My guess would be that this image does not infringe on the copyright, because it is novel and the graffiti is not the subject matter in the photo.
The applicable jurisdiction here would be the state of California.
EDIT
The building that the art was placed on has been abandoned for many years, therefore giving me the impression that the art was illegally placed. A recent google street view image has identified that the building has been condemned and is the future location of a Boys & Girls Club SF:
(you can still see the top of the artwork in question in the link below, if you look closely above the retaining wall to the south east).